Home sales fell for the eighth consecutive month in September as surging interest rates continue to cool the previously hot market, according to data released Thursday by the National Association of Realtors (NAR).
Existing home sales declined by 1.5 percent from August to a seasonally adjusted annual rate of 4.71 million units, while year-over-year sales dropped by 23.8 percent.
Total housing inventory stood at 1.25 million units at the end of September, and unsold units held at 3.2 months of supply.
The U.S. housing market has cooled rapidly amid the Federal Reserve’s fight with strong inflation, which sent mortgage rates soaring. But not all markets have been hit evenly.
“The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6 percent for 30-year fixed mortgages in September and are now approaching 7 percent,” NAR chief economist Lawrence Yun said. “Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”
But Yun noted the lack of housing supply is still putting pressure on would-be buyers, offering a contrast to the 2008 housing market crash.
“Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” Yun added. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”
Median list prices for all home types rose year-over-year to $384,800, marking an 8.4 percent increase. And the number of days the typical home sits on the market continues to tick up slowly, averaging 19 days in September.
Meanwhile, separate data shows new housing construction fell in September as sky-high mortgage rates weakened demand.
Housing starts decreased 8.1 percent to a seasonally adjusted annual rate of 1.44 million units last month, while single-family starts declined by 4.7 percent, according to Commerce Department data released on Wednesday.
Yun said on Wednesday despite a slight overall uptick in the number of homes listed for sale, housing availability remains historically low.